The United States Consults With Mexico on Biotech Corn Ban


Mar 22, 2023 | Agricultural Markets News

Reading time: 2 minutes

The United States has about 90 million planted acres of Corn, and there’s a reason people refer to the crop as yellow gold. In 2021, U.S. Corn was worth over $86 billion, according to calculations from FarmDoc and the United States Department of Agriculture. “We’re good at Corn production. And that’s why you see big acres, big demand, export competitiveness,” Seth Meyer, chief economist at the USDA, says.

“We turbocharged the value of Corn through the application of science,” Scott Irwin, agricultural economist and professor at the University of Illinois, explained. Mexico is a top market for US Corn exports, mostly genetically modified Corn. According to AgFlow data, the US shipped 4.7 million tons of Corn abroad in February. Key markets are Mexico (1.2 million tons), Colombia (0.25 million tons), Japan (0.2 million tons), and Guatemala (0.1 million tons).

At $2.2 billion in 2019, Corn is the most heavily subsidized of all crops in the country. A lot of these subsidies do get embedded into the cost of farmland, and they essentially bid up the price of farmland marginally, according to Joseph Glauber, a senior research fellow at the International Food Policy Research Institute and former USDA chief economist. So, the benefits accrue mainly to those who own land. As per the Congressional Budget Office, the federal crop insurance program’s net spending is forecast to increase to nearly $40 billion from 2021 through 2025. At the same time, farmland values have reached record highs.

The US Consults With Mexico on Biotech Corn Ban

The United States Letter on Biotech Corn

The National Corn Growers Association, along with a broad coalition of national and state agriculture and bioscience organizations, sent a letter to President Biden in early March to thank the administration for beginning technical consultations with Mexico concerning its action to ban imports of biotech Corn. The letter calls for those consultations to start without delay.
“We support your administration’s request for consultations with Mexico regarding its treatment of agricultural biotechnology and denying the use of certain crop protection tools to provide a framework and timeline to resolve this issue,” the 62 groups wrote. “We look forward to these consultations beginning promptly.”
Technical consultations bring leaders from the involved countries, which now includes Canada as well, into formal discussions to resolve the dispute. If the talks are unsuccessful, the U.S. can initiate a dispute settlement under USMCA. The organizations expressed appreciation for the administration’s efforts over several months to resolve the issue through negotiations but indicated that the results, including a revised decree that Mexico issued on Feb 13, 2023, are inadequate, and now it is time for action.
The new decree, which the groups said drew a non-science-based distinction between Corn for food and Corn for feed and industrial uses, is inconsistent with USMCA obligations. The new decree “continues to limit the use of innovative agricultural tools, extends restrictions on safe crop protection products, and enacts trade barriers,” the groups wrote, and it “fails to establish a science- and risk-based regulatory approval process for all agricultural biotechnology products and ignores the immediate need to establish a risk assessment process for gene editing technology.”
“The United States must use the dispute mechanisms afforded in trade agreements like the USMCA to ensure trade barriers or domestic policies do not limit the tools U.S. farmers have to sustainably produce food for our ever-growing world population,” the letter concludes. Mexico’s President Andrés Manuel López Obrador issued a decree in December 2020 to phase out imports of genetically modified Corn by 2024. Mexico’s revised order, issued last month, clarified that the ban applied to Corn for food use effective immediately and could apply to feed Corn in the future.

Other sources: NCGA

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